Financial Exploitation of Senior Citizens Continues to Increase


Securities regulators all agree that exploitation of retirees is a significant and growing problem. According to the U.S. Securities and Exchange Commission, 40 million Americans are age 65 or older, and that number will be 89 million in 2050. Seniors make up 15% of the U.S. population but 30% of fraud victims.

Many seniors have smaller nest eggs than they expected to have as retirement assets fell by 25% or $4.5 trillion between 2007 and 2009. With interest rates at historic lows, many seniors don’t have sufficient income to pay ordinary living expenses. This makes them top targets for unsuitable investments and scams.

While certain people holding themselves out as financial professionals are part of the problem, the most common relationship between perpetrator and victim is that of adult child (32.6%), followed by other family members (21.5%), unknown relationship (16.3%), and spouse/intimate partner (11.3%), according to a 2004 survey of state adult protective services.

If you believe you have been a victim of financial abuse, you may wish to contact an attorney with experience in handling these matters to review your options. You should expect such an attorney to provide an initial telephone consultation, review of documents, and recommendation how to proceed at no charge.

Meanwhile, elder financial abuse needs to be attacked from all sides ? by financial services firms, regulators, lawmakers ? but the best defense is self-defense. With that in mind, state securities regulators have published “10 Tips to protect Your Nest Egg.” By following these self-defense tips, verbatim from the North American Securities Administrators Association (organization of state securities regulators), you may avoid being victimized:

  1. Don’t be a courtesy victim. Con artists will not hesitate to exploit your good manners. Save your good manners for friends and family members, not strangers looking for a quick buck!
  2. Check out strangers touting strange deals. Trusting strangers is a mistake anyone can make when it comes to their personal finances. Say “no” to any investment professional who presses you to make an immediate decision, giving you no opportunity to check out the salesperson, firm and the investment opportunity itself. Extensive background information on investment salespeople and firms is available from the Central Registration Depository (CRD) files available from your state or provincial securities agency.
  3. Always stay in charge of your money. Beware of anyone who suggests investing your money into something you don’t understand or who urges that you leave everything in his or her hands. ?
  4. Don’t judge a book by its cover. Successful con artists sound and look extremely professional and have the ability to make even the flimsiest investment deal sound as safe and sound as putting money in the bank. The sound of a voice, particularly on the phone, has no bearing on the soundness of an investment opportunity.?
  5. Watch out for salespeople who prey on your fears. Con artists know that you worry about either outliving your savings or seeing all of your financial resources vanish overnight as the result of a catastrophic event, such as a costly hospitalization. Fear can cloud your good judgment. An investment that is right for you will make sense because you understand it and feel comfortable with the risk involved.?
  6. Don’t make a tragedy worse with rash financial decisions. The death or hospitalization of a spouse has many sad consequences – financial fraud shouldn’t be one of them. Ask a con artist to describe his ideal victim and you are likely to hear the following two words: “elderly widow.” If you find yourself suddenly in charge of your own finances, get the facts before you make any decisions. Local libraries and universities may offer classes and information on investing. Talk to friends, family, trade organizations, and state or provincial securities regulators for advice on locating a financial professional and checking their background. An insurance settlement may help with expenses but it also makes you an ideal target for fraud. Arm yourself with information and your confidence will send con men running. ?
  7. Monitor your investments and ask tough questions. Don’t compound the mistake of trusting an unscrupulous investment professional or outright con artist by failing to keep an eye on the progress of your investment. Insist on regular written reports. Look for signs of excessive or unauthorized trading of your funds. Don’t let a false sense of friendship or trust keep you from demanding a routine statement of your accounts. ?
  8. Look for trouble retrieving your principal or cashing out profits. If a stockbroker, financial planner or other individual with whom you have invested stalls you when you want to pull out your principal or profits, you have uncovered someone who wants to cheat you. Some kinds of investments have certain periods when you cannot withdraw your funds, but you must be made aware of these kinds of restrictions before you invest. ?
  9. Don’t let embarrassment or fear keep you from reporting investment fraud or abuse. Con artists know that you might hesitate to report that you have been victimized in financial schemes out of embarrassment or fear. Con artists prey on your sensitivities and, in fact, count on these fears preventing or delaying the point at which authorities are notified of a scam. Every day that you delay reporting fraud or abuse is one more day that the con artist is spending your money and finding new victims.?
  10. Beware of “reload” scams. If you are already the victim of an investment scam, don’t compound the damage by letting con artists “reload” and take a “second bite” of your assets. Con artists know you have a finite amount of money. Faced with a loss of funds, some seniors who have been victimized once will go along with another scheme in which the con artists promise to make good on the original funds lost … and possibly even generate new returns beyond those originally promised. Though the desire to make up lost financial ground is understandable, all too often the result is that you lose whatever savings you had left in the wake of the initial scam.

Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 45 occasions. Page Perry’s attorneys have extensive experience in representing investors in securities matters. For further information, please contact us.